Gamma Healthcare Inc., a laboratory located in Poplar Bluff, Missouri, and three of its owners, Jerry W. Murphy, Jerrod W. Murphy and Joel W. Murphy (the Murphys), have agreed to pay the United States $13,619,660.18 to resolve allegations that they violated the False Claims Act (FCA) by submitting or causing the submission of claims to Medicare for lab tests that were not ordered by healthcare providers and were not medically necessary. Gamma, Jerry W. Murphy and Jerrod W. Murphy also agreed to a 15-year exclusion from participating in federal healthcare programs.
The settlement resolves allegations that, from Jan. 1, 2020, to Oct. 31, 2020, Gamma and the Murphys submitted or caused to be submitted claims to Medicare for medically unnecessary polymerase chain reaction (PCR) urinalysis laboratory tests that were not ordered by treating physicians. When a physician ordered a urinalysis (UA) with culture and sensitivity (C&S) or just a C&S, Gamma automatically performed, and submitted claims for payment to Medicare for, a urinary tract infection (UTI) panel of tests by PCR (the UTI PCR Tests). Medicare reimbursements for the UTI PCR Tests were significantly higher than reimbursements for a UA with C&S — on average, Medicare paid approximately $11 for a UA with C&S but paid an additional $573 for a panel of UTI PCR Tests. Gamma’s requisition forms were structured in a way that did not allow physicians to opt out of the UTI PCR Tests. Physicians expressed concerns to Gamma about the UTI PCR Tests as early as March 2020, including concerns that they did not order the tests, that the tests were expensive and that they were not medically necessary.
